>> in this negative yielding world we are and, all roads still need to equities. >> real yields are at historically low levels, and those levels can persist. >> the way to beat higher rates or inflationary pressures is with record high profitability. >> liquidity is coming into the market still, and it is making its way around to a high variety of asset classes. >> ripping away stimulus and slimming on the brakes probably won't be good for anybody in the global economy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.

on radio, on television, a simulcast. get out the calendar. it is november 15. we do the great reset into the holiday season, into when he 22 -- into 2022. 35 days to the pharaoh holiday -- to the ferro holiday. jonathan: after the ecb decision, i am out of here. looking for two hikes next year. when you get the cpi call from these banks, you have to ask about the call that goes with it. that is together with real gdp north of 4%. that is still punchy. tom: what is so humbling in the last hour, how everybody got europe wrong 12 months ago, maybe 10 months ago. right now, the great speculation is what do we get wrong into 2022. it has got to be the growth trajectory. it is a mystery.

jonathan: bank of america looking for a 10% decline in european equities. we expect the anti-goldilocks combination to weigh on european equities. those calls are starting to build. tom: i have been watching the redistricting debate, which is really starting to heat up. the overlay of all of this is the convoluted politics of early next year. lisa: the idea that policy uncertainty will grow if you get the same kind of waves you are seeing right now. i do have to say that right now, the most bearish people are getting is little turmoils in the market. we had today perhaps the capping of a tumultuous week, down 1% for the s&p. scary. first down week since the beginning of october. jonathan: lisa is not impressed by those calls. lisa: honestly, i just think the bears have gone away and what we are looking at is real yields

that are deeply negative, expected to remain seven the united states, so everyone is going along risk. tom: lisa is getting pounded out in social media today in the gloom. it is not the big living crew is going away. they have just been humbled into a silence. they are still there, right? jonathan: humbled by what you said repeatedly this year, the corporate america has adapted. i've heard that from somebody of my guests morning after morning. corporate america keeps adapting to the high cost pressure. the margins have held up. profit ability has been decent. that higher valuation started to kick back in. we will get the call from goldman on that specific point in about 10 minutes. tom: it is going to be important with goldman sachs. do you see how jon saves his best questions for 9:00? jonathan: every athlete has to warm up before they go and play the actual game. lisa: you compare yourself to the professional athletes?

can i just say, the bears have gone away. we actually saw a bear short fund surrender this week. russell clark closed his fund. so sometimes, they are going away. tom: i am going to go narrow here, not on dollar-ruble, but the lira can't find a bid today. 9.94 turkish lira, ever weaker against dollar. i am watching that into the weekend. jonathan: when lisa capitulates, you know the top is in. i'm joking, maybe. perhaps i'm not. yields higher by a basis point. 1.56 30% on tents. euro-dollar, that $1.14 handle. unchanged on the day. tom: to summarize here the push for it, it was so good to have the head of bnp paribas north america with us earlier in the week. his chief market strategist attends now, daniel morris. what does the year ahead look like here?

what is it going to look like, in the king's english? daniel: one of the key changes is the prospect for earnings growth next year. if you look at the consensus forecast for the u.s. next year, 2022, 2021, it is 7%. 4% in europe, 15% in china, but compared to what we expect to get in china, it is not that much. you are just not going to have that earnings momentum to really push the markets much higher, and of course, we have valuations that are not particularly low. jonathan: when you look at these forecasts from wells, 5% on cpi for the next year, 4% real gdp growth for next year. is that good for risk assets? can you see it either way? daniel: i guess it is what are your alternatives. generally we have seen that equities are going to be one of the most resilient asset classes

when you are in either a high or rising inflation environment. jonathan: a bit of a connection issue there with dan morris of bnp paribas. i asked that question because in a world of 5% cpi and 4% real gdp growth, there will be some people out there who believe corporate america will keep adapting, profitability will keep on rising, and this equity market will keep on rising, unless something happens in the bond market. we had pgim on the program yesterday, and the point that robert tipp made, forget all of this stuff about higher inflation. look at what is happening with the long bond, still in and around 2%. it is not building higher in a material way. lisa: this is friendly pessimistic. bond traders tend to be pessimistic. this might be the most bearish indicator out there. the idea that you saw this curb inversion, that 20 year yields were higher than 30 year yields for the first time since the reintroduction, this is indication we are not going to get long-term runaway growth, and without that, people see

this as an accommodative backdrop in the near term that can remain goldilocks for a bit longer. jonathan: we have reestablished that connection with dan morris of bnp paribas. let's start again. the outlook, cpi a 5%, real gdp of 4%. why the equity market can still gain with those type of numbers. daniel: i think we've got to keep in mind one with a more modest earnings growth projection, but even with a higher inflation, we have the ability, given the very strong demand you have on the consumer and business side, the businesses are able to push through those price increases and the price increases you see for the most we think are going to be sustained so we are not particularly concerned about the outlook for equities, to styling back our expectations for how much they are going to be able to appreciate. as it has been for a while, the relative value and relative return opportunities given that we are not expecting a big rise for equities in aggregate, as we

are looking at emerging markets, we will see if they make a lot of the lost ground we saw over the last year. lisa: is that something you are betting on of that we will see more of a reflation trade with equity markets leading? daniel: at this point we are already rotating some of the exposure we have from the u.s. to emerging markets, and there's two rationales for that expectation. one, we have already seen the support you got from commodity prices, and if you think of e.m. x asia, we think commodity prices are going to continue to gain. of course, the key is what happens in asia, and after the underperformance, if you look at valuations, anticipating support out of the chinese government, we think there's going to be an opportunity for these markets to pick up and make up a lot of the lost ground. another thing to keep in mind is if you look at u.s. returns relative to the world ex-us, you've never had a longer than for your streak where the u.s.

outperforms, and this year makes the fourth year for u.s. outperformance. lisa: how concerned are you that the dollar might strengthen materially? if the market starts to hike in line with expectations, it may disrupt this trade in a meaningful way through the fx channel. daniel: absolutely, it is something we have seen recently, and we don't have a position currently. we are expecting the commodity currencies to override that factor and expecting they will be able to benefit vis-a-vis the dollar. we are looking for that trade, but i guess in a slightly different area as opposed to developed market currencies. the year are looking more commodity currency, and if commodities are priced in dollars, the threat from dollar strength should hopefully be medicated. jonathan: would a different -- be mitigated. jonathan: would a different fed chair change this for you? i am just trying to work out how to move the dial. daniel: absolutely, a different

person, different people on the committee, the prospect for rate rises absolutely would make a difference at this point. we are working with the chair that we know. jonathan: dan morris of bnp paribas asset management. it is the middle of november and we still don't really know who the fed chair will be in three or four months. tom: no we don't. the hearings, what do we say, every hour, every 12 hours we move forward has got to tilt more towards powell? jonathan: you would think so, and then i think things are going to get more contentious in these hearings on either side of the aisle, given where inflation is at the moment. i know this individual has huge republican support. on the other side, we know what senator warren thinks about it. lisa: and how the market will respond, whether people do think lael brainard is going to be the more dovish pick. i've started to write my outlook. the headline is what does it mean to be a bear in 2022. jonathan: and what does it mean to be a bear? this sounds very emotional.

lisa: it is a very emotional question. are you looking at something with significant downdraft? are you looking at the bond market having a bearish market? are you looking at a more hawkish fed? these are the questions. jonathan: i've had success folding mindfulness and meditation into my book. if you fancy at working out. . lisa: please ship me over a copy. tom: i wish i had a publishing career like you guys. where are we on drawdown meditation? jonathan: a few more months away. you know what it is like. jonathan: which one would you rather read, tom? that is the big question, isn't it? do you want a chapter in this book, lisa? [laughter] lisa: carry on. jonathan: equity futures up 0.2%. tom, you will do what you do with all the other books. read a few pages and pretend like you have read the whole thing.

tom: on page 2 -- jonathan: the only page she read. [laughter] this is bloomberg. ritika: with the first word news, i'm ritika gupta. health care giant johnson & johnson will split into two companies. one will be focused on drugs and medical devices, the other on its well-known consumer brands such as band-aid and tylenol. the consumer unit contributed to 17% of j&j sales, while the drug unit was responsible for 55%. a warning from u.s. on russia. bloomberg has learned that washington has told the european union that russia may be considering an invasion of ukraine. the u.s. has been monitoring a buildup of russian forces on the ukrainian border as tensions flare between russia and the eu over energy supplies and migrants. russia said talks of an invasion are unfounded. in germany, the fourth coronavirus rate is hitting with full force, and there is no sign

of record infections easing soon. daily infections past -- total infections past 50,000 this week. elon musk keeps selling shares of tesla. the world's richest person unloaded almost $700 million of stock in the electric carmaker. that brings total sales this week to about $5 billion. some of the trades were made under a plan he established in september. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> what is very unknown in this

cycle is the cumulative response to this kind of inflation we have not seen in 30 years will be much more muted than historically. that is going to be meaning that real rates, and our view, are going to remain very low for a sustained amount of time. jonathan: we are running an economic experiment in real-time. that was jean boivin of black rock investment. up nine points on the s&p, advancing 0.2%. the nasdaq also positive 0.2%. yields are up on the week, up on the session, 1.5647%. tom: right now on a friday as we reset for the end of this year, and some of the window gazing into 2022, it is time that you reset. christian mueller-glissmann

of goldman sachs is hugely qualified to talk about the dynamic of the market into your portfolios, retail and institutional, about the foundation back to 1926 of the 60/40 portfolio. thank you so much for joining, and your work with the cfa institute, of which i am a member, as well. how dead is the dead 60/40 board folio? christian: it always is a bit aggressive to say you have the death of one of the most basic and well-known investment strategies. i think there has always got to be some benefit to be balanced. but i think you have a particularly poor kind of starting point for these type of portfolios from two perspectives. first of all, everything is expensive. we know that. equities and bonds are expensive at the same time. that was the same a few years ago, and still these portfolios continued performing very well, but what is new is how we are starting the cycle. the cycle is starting with more inflation and flatter yield curves.

that just means that what bonds can offer you in the portfolio is even more limited. often in terms of returns and with pickups to risk reduction. tom: one of the other determinants is risk diversification. i have seen 300 stocks down to sonali 50 years, what sequoia did years ago. tell us about your view on the new diversification if bonds are so unattractive. do i own apple, amazon, and seven other stocks? christian: it is a good point. i think you need to look for all of the sources of diversification. i think there's got to be much more potential for regional diversification. in the last 20, 30 years, all of the academic evidence is showing that there is no benefit of having a global portfolio. if anything, the best thing was to have all of your money just in the u.s. equity market, but now that we introduce inflation risk, inflation volatility,

policy uncertainty, which we haven't had for the last 20, 30 years, and possibly much more macro volatility, what we could get is more diversification across the markets, and also across sectors, and the leadership is much less narrow. so it to some extent, you should not just be in the winners of the last cycle and run a really concentrated portfolio. you need to branch out a bit and diversify. the other key area which we all know has already done really well israel assets. if it is commodities or other sources of real cash flows, i think that will also feature more heavily in the coming cycle. lisa: is cash better than developed market bonds right now? christian: this is the most interesting discussion, in my opinion. we all know that equities look at her than bonds in the long run -- look better than bonds in the long run on most models.

the discussion is really bonds versus cash. bonds have for very long periods of time lost you money versus cash. the ratio of cash outperforming bonds over a 10 year rolling period is nearly 40%. so it is nearly 50-50 that you do better with cash than with bonds based on the last 100 years. we have been in the biggest market on record, so we feel that is kind of unusual, but if you look back over history, there are plenty of periods. one of the most important indicators of how bonds might do versus cash is the steepness of the yield curve, and the steepness of the yield curve is half of what we normally get after a recession. to some of the comments we had earlier, because there's so little optimism about the duration and longevity of the cycle and how much central banks can hike, that means you have less buffer and less return potential for bonds versus cash, so i think definitely, cash looks better than bonds in the coming cycle than what we have

experienced in recent years. lisa: how about inflation? doesn't that erode the idea? christian: do you want to lose money faster slow? -- money fast or slow? [laughter] with cash, you are losing money very slowly, whereas with bonds, you have other drivers. we all know that real yields have moved to incredibly low levels, and there is a relationship you currently have where inflation expectations go higher and higher, but the real yields don't follow, and we know that might change, and so you have losses in bonds. tom: you can't have a mueller-glissmann article without a chart. we look at the long-term log performance of the equity market, andy rate unspoken fear -- and the great unspoken fear is another 1970's.

what is the probability of that? christian: i think it is definitely higher postcrisis and post-covid because we have this new inflation uncertainty. it is a very --animal. as a result, the probability has gone up. we would still argue that 1970's stagflation, don't forget there was 10% annualized inflation over a decade. it is quite aggressive. we also have to consider at the time, the type of macro backdrop with regards to demand, supply disruptions related to opec embargo, the iranian revolution. there were other things going on much more extreme than what we are dealing with. i think stagflationary momentum is something we need to fear next year, where i think we know that growth will come down,

inflation might remain sticky, and we get a bit of monetary policy normalization and potentially a bit of a catch-up for monetary policy, and that can be a bit harmful for markets, but i think the 1970's stagflation to us is still a pretty extreme event which i would still put more into the tail risk bucket, not the base case. jonathan: that was a clinic. send our best to the team as well. good to see you. it has been too long. tom: outstanding. did you see how he channeled lisa abramowicz there at the end, talking about stagflation as a worry next week? jonathan: he was bringing up some important points. i don't know if he was calling out lisa personally. the point he made about cash over bonds i thought was interesting. lisa: fascinating. i love it. jonathan: do you want to lose money quickly or slowly, or i'll let months? -- or all at once? lisa: people want flexibility to pivot if the policy makers

themselves change. jonathan: jp morgan earlier this week running 50% cash. unbelievable. tom: what do you have on "the real yield" today? jonathan: big conversation on the new fed chair. breaking news. i don't. just to be clear, i don't. but tuning. this is bloomberg. ♪ bloomberg. ♪

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jonathan: what a week it has been. trying to get you to the weekend, this is "bloomberg surveillance." potentially the biggest weekly loss since early october. bond market yields are higher by more than 10 basis points. a big move on 5's and 2's. the cpi print has brought to life the outlooks for next year making people rethink how aggressive the fed might need to be.

lisa:: this is not just an energy story. i think that jolted people. jonathan: inflation print, "broader and stickier." tom: i would go to j.p. morgan tonight, weekly prospects and rbc capital. the keyword is broader. i did not expect that, and yet here is. jonathan: standard chartered put it perfectly, it is as bad as it looks. i mentioned this yesterday, worth mentioning again. you still get 5.4% at an annualized pace and rising. this is the issue for me. we started the year, the

transitory story made sense. we had temporary factors forcing inflation higher. they would fade and inflation would come back down. what has happened is the stories have gone broader and stickier, so it will last longer into next year. tom: the next 30 minutes are important. damien will join us. looking forward to that conversation. tom definitive on wage growth in the study across market economy. on wage growth, what does your x axis look like a question or how has the timeline into next year changed by gaming real wage growth? >> good morning. i know i had was supposed to be

with you on tv but my internet had issues. anyway, i think what you need to keep in mind is we keep hearing this idea about how the curve is flat, broken. if you look at the phillips curve in a more narrow way, a couple of years before the pandemic hit, it was rather steep. you were generating inflationary pressure on the back of tight markets with wage pressures building. part of the conversation is that is where we are going if we are not already there. the prospect for wage gains is solid. we have to bear in mind we are dealing with incredibly elevated inflation. in real terms, it will look

abysmal from eight wage perspective in the immediate term. inflationary pressure is going to slow. we have had a call that inflationary pressures would remain elevated longer than appreciated. in 20, i think things look better from a real wage -- in 2023, i think things look better from a real wage perspective. tom: what about that to a 2% level? what you think about where we were from a wage dynamic perspective, here is where it gets tricky. everyone has the wage measure they prefer most. we like to look at the index of aggregated weekly payrolls, something we call the wage pie.

prior to the downturn, it was running about 5%. i think you could easily have a robust wage picture. that is where the debate comes in. which measure do you want to use? there are at least half a dozen good ones. i think this is a fair way to think of it. i think if you get in the 2% to 3% range. jonathan: you had a note on inflation expectations. we get a read on that later this morning. your conclusion was they matter. can you walk through why they do so much? >> which one? jonathan: it was on inflation expectations about a month or so ago. i don't recall the title. the conclusion was inflation expectations matter. you are pushing against things we have heard more recently. >> if you think back over the

last year or so, and i think the fed owns some of this continuing to tell people don't worry about inflationary pressure, it is going to fade. people did not take that to heart. you saw inflation expectations start to rise. when they started to rise in april, guess what started to fall in april? confidence. more specifically, people's expectations or view on whether it was a good time to buy bigger ticket items started to collapse at the same time the rising inflation expectations started to rise. people were impacted by what happened on the inflation front. it showed up in the confidence data. it is difficult to prove the

counterfactual. you can have a reasonable discussion about, should consumption have been stronger? make no mistake. we had delta that got in the way. we understand all of that. but it is evident from the data that the consumer did feel the pinch of rising inflation, and it showed up in their expectations of buying things. lisa: in a recent note, you said it does not matter who is at the top of the fed next year. they will have to respond more meaningfully. they cannot ignore what we are seeing on the inflationary front. what do you mean by responding? they are tapering. they have plans to reassess midyear raising rates. do you think they will be more aggressive? >> great question. we opened the daily deck with that comment. over the prior couple of days, all we heard about was is if governor brainard replaces jay

powell, she will be incredibly dovish. unless they are changing this, there is still a dual mandate. our point was it does not matter if it is someone perceived as dovish or not sitting at the top of the fed, that they would have to respond to the inflation dynamic we are talking about. how forcefully? fine. that is a reasonable question/argument to have. getting to max employment next year, there would be no reasonable grounds to sit on the sidelines and not raise rates. that was our bigger point. lisa: fed officials have said these things will abate. it is not our job to respond to supply chain disruptions or

commodity price increases. these are not things we can control. what is your argument of how they should move in response to inflationary pressures within their control? thank you i think -- >> i think jonathan framed it perfectly before i came on. there has already been a broadening out of inflationary pressure. it is not limited to the standard trope about the supply chain and all the boats in the bay. i think it is beyond that. there is incredible demand. the consumer is sitting on a mountain of cash up and down the income spectrum. now you are seeing this broadening out. we have a diffusion index. it is a measure of the breath of inflationary pressure. we have never seen it this high. it is not just a few categories

doing all of the lifting. there are a few categories responsible for lifting it materially. as far as the breadth, that has expanded out. services prices is only starting to get going now. that is a shelter story for sure. that is also a medical care services story. used cars and autos are important things, but medical care services is also significant and is only showing signs of lifting. we know a lot of medical care services were not getting done in the pandemic. that is another category that will continue to show significant upward pressure over the coming years. it is not just about the fed responding to boats that can make it into port. it is about a broadening out of

inflationary pressures. jonathan: thank you, tom porcelli, on the inflation backdrop as we get a headline on coffee hitting a seven-year high. anyone following the weather in brazil, not pretty. tom: i will make a visit to the grocery store. the bottom line is it is every single aisle. i don't think we can center on oil. it is everything. jonathan: looking forward to catching up with mohamed el-erian on the inflation story on why he thinks we could be making one of the worst inflation calls in decades. he is 20 minutes away. looking forward to it. from new york city, this is bloomberg. ♪

>> oil is heading for the longest run of weekly losses since march. president biden is keeping investors guessing as to whether he will intervene on prices. the price in the u.s. has hit a seven-year high leading to a number of moves including a release from the reserves. the electric vehicle company raised $12 million earlier this week and wants to open two new assembly factories that were already planned. arizona, michigan, and texas are being considered for the sites. plans for a new global carbon market have run into new obstacles. talks will continue today with less than 24 hours to go before the summit is set to wrap up. democrats try to pass the tax

and spending package. democrats want to expand it as one of president biden's economic plans. progressives are opposed to some version of the salt tax. a federal appeal has temporary granted the former president's request to keep documents from being released to a congressional committee investigating the capitol riots. global news 24 hours a day. i am ritika gupta. this is bloomberg. ♪

>> we are already rotating exposure from the u.s. to

emerging markets anticipating further support out of the chinese government. we think there will be an opportunity for these markets to make up lost ground. tom: daniel morris with their theme on emerging markets. bnp paribas is known across the pacific for decades of experience. a.l. is front and center in the great reset into next year. -- e.m. is front and center in the great reset into next year. i need to go to you on a clinic that matters. how beholden usual world to a weak dollar? >> let's not rail on previous guests. he made a great point about china. if you are investing in e.m.

dollar bonds, china will make some money for you. valuations have gotten crushed. it is probably the only game in town now. the dollar is what matters most moving offshore. from that perspective, difficult to get bearish on the dollar in this environment. the only way to approach emerging markets local assets is to have a position on the dollar and perhaps go along the real versus short. tom: i look at where we are with e.m. and it comes down to having the courage to go in. how do you perceive the fragility? the imf will tell me they are better positioned now. do you buy it?

>> they will point at fundamentals like including current account balances which admittedly have improved, but that is more of a remuneration impact. that does not mean the economies are more healthy. if you look at the total debt load, we are through the roof on a local currency debt perspective. i think 11-20 majors have seen external debt ratios surge more than the five-year averages would indicate. it does give me cause for concern. lisa: why haven't rate hikes vote this dynamic -- fought this dynamic? damian: emerging market is deeper and tense. it is difficult to get a handle on it. anyone in their right mind would

say the moves would be a great opportunity. if you did that in mexico overnight with the central bank failing to deliver, but it is idiosyncratic. you have to look at low yielding funding currencies. you cannot fund. they are forward markets going out one to three months. you don't have the negative carry you can feed on. it does make things more challenging. that is what we are here to do, to show you a better way. tom: sales pitch. lisa: your sales pitch is the idea of china being the exception and not the rule when it comes to emerging markets. you said you see opportunities when it comes to making money at a time when there is growing concern about the weakness in

the home developer space. why is now a good time? is it because of likely easing by the people's bank of china? damian: it is the relaxation of credit and mortgage debt. policy banks are boosting lending to the sector. a lot of enterprises are pleating to beijing asking for better lending terms to acquire troubled property managers like abercrombie -- evergrande eight. that should support high-yield that is yielding 22% or 23%. that is where the real value play is. that is probably the point you want to play it. how much risk can you take in the sector given all the uncertainties? tom: is there an opportunity in eastern europe given the

politics of the moment? can you play ruble? damian: ruble is tough after what we have seen in the last 24 hours with belarus and everything we are seeing. the way i prefer to play eastern europe is through romania, poland, check of the lock, and hungary. we are seeing real inflation. we are seeing yields on the local level climb the past few months. those economies are relatively stable and safe. tom: you don't care. we only had you on to talk about nfl football this weekend. what is the game we should watch? damian: you don't want to watch the jets-bills game like i will be. that will be an exercise in futility. i don't know. in my football league, i have

been in a bad place the last few weeks. it is anybody's guess. i will be watching "the red zone." tom: damon sassower, thank you so much, bloomberg intelligence. we laugh about it but paul sweeney tells me it has been a bang up season for the nfl. lisa: are you really trying to get me to talk about football? tom: football, entertainment. after disney, there is a mystery about where this is going post-pandemic. lisa: they have had a shrinking audience for a while and young people are not watching football and baseball. they are watching other people play video games. it defies logic to me because i did not grow up that way. my kids try to give me a tutorial. tom: we are making jokes about you putting a deck together on next year.

the mystery in this humbling time is greater than 12 months ago. lisa: the mystery around the economy, not necessarily markets. this is the interesting distinction. if we accept the idea that real yields are going to remain the slow, there is no -- remain this low, there is no other game in town other than equities. where does that leave the bears who do not want to go there because they think weakness means slowing growth? this is a key conundrum for 2022. tom: christopher makes it clear that if you look at the sum total of fundamentals, he is optimistic. he says the construction is there for a better market. lisa: people are generally optimistic about the market even if they see potential deceleration in growth. this is the differential to parse through.

tom: is jonathan ferro going to ask mohamed el-erian about jets-bills? lisa: he would love that. tom: johnson & johnson to separate. the chief executive officer at 10:15. ♪

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jonathan: let's wrap up the trading week. good morning. equity market positive .25%.

the countdown to the open starts right now. announcer: everything you need to get started, this is bloomberg: the open with jonathan ferro. jonathan: from new york, we begin with the issue, hotter for longer. >> these inflation numbers are bonkers. >> we are starting to see how corporate america is going to adapt. >> the supply chain issues and participation rate get resolved in 2022 or not. >> i am concerned about the shape of the curve. >> it is hard to argue these conditions will be true a year from now. >> the question is whether it will translate into